HDFC SL Crest Review
Plan Name: Crest
Insurer: HDFC Life Insurance Company Limited
Category: Unit Linked Insurance Plan
Objective: Financial protection of family and good return on investment
HDFC Crest is a Type I ULIP which means that under the death clause, you are entitled to higher of Sum Assured or Fund Value
Crest has both options- one can freely allocate in any of the funds available or choose NAV fund. In the latter, you will get the fund value based on guaranteed NAV. The guaranteed NAV will be equivalent to highest NAV achieved during the first 7 years of fund or INR 15 whichever is higher.
Benefits of HDFC SL Crest
Maturity: The fund value as per NAV option or free asset allocation will be provided to you.
Guaranteed Maturity Addition: Amount equivalent to 1% of fund value will be added to the maturity amount.
Settlement Option: Instead of lump sum amount on maturity, you can choose to receive the amount in installments over the next few years.
Loans: You can avail the loan facility however the maximum loan amount that can be availed would be lower of 40% of surrender value or annual premium.
Eligibility for HDFC SL Crest
Minimum Entry Age: 14 Years
Maximum Entry Age: 55 Years
Policy Term: 10 Years
Premium Paying Term: 5 Years
Minimum Premium: Rs 50,000 Annual Mode
Returns in HDFC SL Crest
Any ULIP’s performance is directly dependent on the performance of the fund which in turn depends upon equity and debt market. If the market is rising, it will automatically reflect on your returns.
For free asset allocation HDFC Crest has 5 funds- Opportunities fund, blue chip fund, balanced fund, income fund and short term fund.
The NAV fund of HDFC SL Crest is called Highest NAV Guarantee fund. The fund invests in a mix of equity and debt and proportion keeps changing as per some dynamics.
In a typical scenario, you will be able to get at least 10% return on investment
The investment risk is borne by the policyholder.
What charges does HDFC Crest deduct and how much?
The premium amount paid by you is not invested directly. Initially, some charges are deducted and then units of the fund are bought. The rest of charges are deducted by cancellation of the units.
Premium Allocation Charges: These charges are deducted as percentage of premium. Insurer deducts these charges on account of expenses incurred by the company – medical examination, policy issuance, underwriting bills. The charges are deducted till 5th year and ranges from 2% to 4% of annual premium.
Fund Management Charge: The annual charges for the Funds are 1.35%.
Cost of Guarantee: An additional charge of 0.5% will be charged for the NAV fund.
Policy Administration Charge: These are monthly deductions which start from first month and are for maintaining the policy- paperwork, work force etc. The monthly charge is 0.31% of annual premium and will increase by 5% every policy anniversary.
Mortality Charge:These are charges deducted as a part of life cover provided and are recovered through cancellation of units.
Are there any tax benefits?
Under Section 80C you can avail tax benefit, yearly premium (not more than 1lac) will be deducted from taxable income.
Under Section 10(10D) death claim is completely tax free.
What else should I know about?
Partial Withdrawal: If policyholder is above 18 years and the minimum amount that can be withdrawn is Rs 10,000.
Grace period: Crest can be renewed within 30 days from the premium due date. Additional 30 days are given after notice has been sent to revive or discontinue the policy.
What to do?
To Cancel Policy: Crest plan can be cancelled within 15 days of receiving the policy contract. A written application can be submitted to any branch for the same. The premium will be paid back minus some charges like stamp duty, medical reports.
If you want to cancel policy after the initial period of 15 days, you can do it but the amount will be paid only after lock in period years. If you cancel policy within 5 years from inception, the amount will grow at interest rate of 3.5% compounded annually. After five years, if you cancel the policy, there will be no cancellation charges and amount will be paid immediately.